Obama would do this by plundering Fannie and Freddie Mac yet again. It would be the grandest Stimulus of all. This new housing bailout (called “principal write-downs”) would add even more debt to taxpayers who already absorbed $141 billion in losses incurred by these housing giants.
Obama and his cronies need something big to make an election splash, but Edward J. DeMarco, the acting director of the Federal Housing Finance Agency, is the Fannie and Freddie regulator who stands in the way. Mr. DeMarco is the conservator of Fannie Mae and Freddie Mac, appointed in 2008.
This thuggish move by Obama would allow him to put through a Stimulus without having to go through Congress. Mr. DeMarco, however, won’t cooperate.
Mr. DeMarco told WSJ reporter, Kimberly Strassel, that when it comes to principal forgiveness, there is no “upside” to taxpayers—the lenders lose whether the borrower fails or succeeds. “If Congress wants to appropriate money” to pay for the program, “that changes the calculus.” Until then, he doesn’t view principal forgiveness as within his “statutory mandate.”
Obama wants DeMarco out of the way as a result. Obama tried to put another nominee up for the job, the Republicans balked, and the nominee was pulled. Next, Mr. DeMarco was assaulted by no less than 17 House Democrats who demanded he step out of the way. Then, no less than Larry Summers was unleashed on him, accusing him of single handedly preventing an economic recovery.
The White House is not supposed to put pressure on an independent regulator, in fact, this behavior is an abuse of our system, but that didn’t stop Obama from putting intense pressure on DeMarco to get his (Obama’s) update to the failed Home Affordable Refinance Program, which makes it easier to refinance Fannie and Freddie mortgages.
It wasn’t enough for Obama. Nineteen House members demanded another sit-down with DeMarco this past Wednesday to assault him yet again. Read here: Under attack by the White House – check out the WSJ article